Douglas A.

Grandt PO Box 6603 Lincoln, NE 68506 July 16, 2013

Mr. Rex W. Tillerson ExxonMobil Corporation 5959 Las Colinas Blvd. Irving, TX 75039 Re: Pegasus Testing Secrecy - is this Exxon’s idea of good Corporate Citizenship?
Dear Mr. Tillerson, Of course, you know about the premature deaths that can be eliminated by switching to carbon-free energy technology. Shifting investments to innovative solutions saves lives. What’s stopping us? Is it an engineering challenge? Is it an economic challenge? Is it ego, greed and sloth? Whatever the reason, it is time to break from the obsolete paradigms. You know this. Remember the first point of the Scout Law: A Scout is TRUSTWORTHY.

Exxon's Secrecy Over Ruptured Pipeline Could Mask National Dangers
Reports that would reveal whether Exxon properly maintained its Pegasus pipeline are being kept from the public. The data has national ramifications.
By Elizabeth Douglass and David Hasemyer Jul 16, 2013

The 1940s-era construction process that ExxonMobil said caused an oil pipe to rupture in Arkansas earlier this year is a common and well-documented problem the pipeline industry has battled for decades—and one the industry believes can be detected and controlled with appropriate vigilance. "With proper inspection and maintenance, these catastrophic events can be prevented," said Mohammad Najafi, a pipeline construction expert and engineering professor at the University of Texas at Arlington. "As pipelines exceed their design lives, they need more maintenance and a proper asset management strategy to prevent or minimize these ruptures."

Tar ball on the edge of a cove in Mayflower, Ark. in the wake of Exxon's Pegasus pipeline spill. Credit: National Wildlife Federation

Mr. Rex Tillerson July 16, 2013 Page 2 of 5

That leaves the public and regulators with two critical questions: Did Exxon manage and test its broken Pegasus pipeline according to established guidelines? And, if it did, is the Arkansas accident a warning that other pipelines might be at risk? If so, the repercussions would be nationwide, since many of the nation's liquid fuel and natural gas pipelines are of similar vintage and were built using the same inferior construction techniques. The gas line that ruptured in San Bruno, Calif. in September 2010, killing eight people and destroying 38 homes, included segments made with the same process as the Pegasus pipe. Investigators found that the pipeline's owner, Pacific Gas & Electric, had neglected to properly inspect and repair the line and that regulators issued testing exemptions and placed "blind trust" in the company's assurances. Recent maintenance and testing records for the Pegasus, as well as the metal analysis report that blamed the accident primarily on a 65-year-old manufacturing defect, would offer important insight into why the pipeline failed. Those documents, however, are being withheld from the public as well as from a Congressional committee, two Arkansas Congressmen and a water utility worried that the pipeline could foul drinking water for nearly half a million people. Exxon has given pertinent data to the Pipeline and Hazardous Materials Safety Administration (PHMSA), the federal agency that regulates the nation's pipelines, and to Arkansas Attorney General Dustin McDaniel (in response to a subpoena). But Exxon says the two most recent inspections it conducted on the Pegasus are proprietary and confidential, so they shouldn’t be shared with the public. InsideClimate News has filed a formal request with PHMSA for the metallurgy report, along with a Federal Freedom of Information Act request for additional documents connected to the spill investigation. PHMSA hasn't responded to the Freedom of Information Act request, which was filed in early June, and has refused to release the metallurgy report, citing the agency's ongoing investigation of the accident. Exxon spokesman Aaron Stryk said the company is concerned only about keeping the inspection reports private. As far as the metallurgy report is concerned, "it is up to PHMSA when to make that publicly available," he said. Jonathan Phillips, senior policy adviser for the House Natural Resources Committee, rejects the notion that the records should be kept from public view. "If there is information about the chance of this becoming a pattern, then it is information that should be made known," he said. "Without that information, how do you know?" Exxon tested the Pegasus just a few weeks before the spill by sending a sophisticated inspection device called a pig through the line to look for flaws from the inside. Pipeline owners and regulators rely on pigs to detect corrosion, and specialized pigs are increasingly used to find potentially dangerous seam weld and other pipeline cracks. If the pigs used by Exxon in 2010 and 2013 both failed to detect the crack that turned into a 22-foot breach, it will cast doubt on their reliability for seam weld inspection. Carl Weimer, executive director of the Pipeline Safety Trust, a nonprofit watchdog organization based in Bellingham, Wash., said Exxon’s February test should have flagged the defect that ripped open the pipe. "If it wasn't detected, then that says maybe there is no way of finding these flaws," Weimer said. Is this Exxon’s idea of good Corporate Citizenship?

Mr. Rex Tillerson July 16, 2013 Page 3 of 5

The section that failed was constructed using low frequency electric resistance welded (ERW) pipe to create long seams down the length of the pipe. The technique was discontinued by 1970. Not all the pipelines of that vintage and built that way have defects, but they are all suspect and require constant monitoring to avoid disaster, experts say. Several industry reports offer step-by-step guidelines for monitoring and maintaining pipelines with these specific flaws. Richard Kuprewicz, president of the pipeline consulting firm Accufacts Inc., said the known pipe manufacturing defects is like being predisposed to a grave illness. "It may be a dormant gene or it may be an active gene," Kuprewicz said. Depending on how you treat and test the pipeline, "It may go to cancer, or you could live your entire life and it's not a problem." Worrisome Regulatory Gap Interest in the information being withheld from public view is keenest in Mayflower, Ark., where the Pegasus pipeline split open on March 29, sending an estimated 5,000 barrels— or 210,000 gallons—of sticky oil-like Canadian diluted bitumen, or dilbit, into a nearby lake and neighborhood, sickening residents and forcing 22 families to flee their homes. It's also been a longtime concern for Central Arkansas Water, because more than 13 miles of the Pegasus line cross through a utility watershed that serves 400,000 people in the Little Rock area. "We need to know what factors led to the rupture, and [have] assurances that those factors do not exist in the watershed," said John Tynan, watershed protection manager for Central Arkansas Water. "We want to do this through our own third party evaluation of the information." Officials at Central Arkansas Water asked to review Pegasus inspection records, but the request was rebuffed. The water utility wants the pipeline re-routed around the watershed. The Pegasus pipeline stretches 850 miles from Illinois to Texas, and carries up to 90,000 barrels per day of dilbit from Alberta’s landlocked tar sands. Its unusually long outage— four months so far—is already costly for Exxon, and threatens to become more so as its actions are scrutinized by regulators, the public and the Environmental Protection Agency, which has sued Exxon alleging that it violated the Clean Water Act. A second lawsuit, filed by the state of Arkansas, accuses the company of violating state environmental regulations. For Canadian oil producers, the idled pipeline is exacerbating a costly gap between pipeline capacity and booming production. What's more, the Pegasus rupture gives more ammunition to those who oppose construction of the controversial Keystone XL pipeline, which would carry dilbit from Canada to Texas. Last week, Exxon said the metallurgy report from an independent laboratory found that "original manufacturing defects" caused the Pegasus pipe seam to break apart in Arkansas. The lab also found that the pipeline was especially brittle, which limits the metal's ability to flex with changes in pressure or flow inside the line. Exxon said the report included "no findings that indicate internal or external corrosion contributed to the failure." Exxon and PHMSA are conducting further tests to determine what else might have contributed to the pipeline's failure. Is this Exxon’s idea of good Corporate Citizenship?

Mr. Rex Tillerson July 16, 2013 Page 4 of 5

The section of the pipeline that burst was built in the late 1940s and originally ferried crude oil from the Gulf northward. After joining together with segments built in 1954 and 1973, the Pegasus carried oil from Nederland, Texas north to Patoka, Ill. For four years, from 2002 to 2006, the pipeline went unused. Then Exxon reversed the pipeline’s flow so it could carry a different product, Canadian dilbit, to Gulf Coast refineries. Three years later, in 2009, Exxon reactivated and upgraded pumping stations and other equipment so it could push 50 percent more dilbit through the 20-inch Pegasus line. The capacity expansion would have included a significant jump in operating pressure and stress on the pipeline, according to Najafi, the engineering professor at University of Texas-Arlington. That series of changes did not trigger any regulatory reviews or special testing. PHMSA merely requires pipeline operators to conduct tests at least every five years. The testing methods are at the discretion of pipeline owners. "If it's sound pipe, and you've got a good handle on the threat, [reversing flows or increasing pressure] won't make a difference," said Kuprewicz. "But if you've lost control of the anomalies, either by assumptions or you just don't get it, you are increasing the risk that the pipeline will fail. Is it illegal? No. It's a judgment call by the pipeline operator." That regulatory gap might become more of an issue as more pipeline operators repurpose aging pipelines by reversing the flow and converting natural gas pipelines to carry oil and dilbit. A study by the National Petroleum Council for the Department of Energy noted that "integrity issues will become more common dues to a number of age-related issues" such as corrosion and weld seam failures. "Pipelines operating outside of their design parameters such as those carrying commodities for which they were not initially designed, or high flow pipelines, are at the greatest risk of integrity issues in the future due to the nature of their operation," the report said. There may be special risks for pipelines moving dilbit. In a presentation to the petroleum council earlier this year, PHMSA's Jeffrey Wiese said a thorough review is needed. One of the slides presented by Wiese, the agency's associate administrator for pipeline safety, said: "We strongly support a rigorous analysis of the unique risks associated with dilbit transportation. Threats posed by this different commodity require thorough understanding. Risk controls for these threats must be robust." In 2006, when Exxon reversed the Pegasus line to carry dilbit, it completed a hydrostatic test of the line that caused 12 pipe failures before it passed. The test is designed to force failures to eliminate vulnerabilities that could cause spills when the pipeline is in use. The company’s tests in 2010 and 2013 used the pipeline inspection tools known as pigs, which got their nickname from early models that squealed as they passed through pipes. Several industry reports have found that seam failures similar to the Pegasus rupture were caused by "pressure cycle-induced fatigue," a condition that develops when there are large and frequent swings in a pipeline’s internal pressure and flow. Pipelines carrying dilbit are prone to more pronounced pressure swings that can activate and accelerate pipeline flaws, according to Kuprewicz. That's because the chemical

Is this Exxon’s idea of good Corporate Citizenship?

Mr. Rex Tillerson July 16, 2013 Page 5 of 5

composition and viscosity of the product varies by the batch, depending on how much and what type of diluent is mixed into the tar sands. In Exxon's case, the Pegasus failed while operating below its allowed operating pressures, Kuprewicz said. "Which means this seam anomaly grew to a point where even normal operations put it at risk to rupture." In the wake of the pipeline accident, PHMSA issued an order that prohibits Exxon from restarting the pipeline until the cause of the rupture is fully understood and adequate protections are in place. Once shipments resume, the pipeline must operate at a lower pressure, PHMSA said. Bruce Bullock, director of the Maguire Energy Institute at SMU Cox School of Business in Dallas, said the government and Exxon will need to investigate everything about the pipeline in the coming months, beginning in 1948 when the pipeline was first installed. He likened it to a CSI—crime scene investigation—for pipelines. "They have to look at every little detail because in those details might be the clues to what happened," he said. "They should be looking at the product that has been put through the line over the years, the operating pressures and checking for any anomalies noted; those kinds of things." Kuprewicz said that as the investigation proceeds the public and outside experts should have access to the pertinent reports. "You can only play the secrecy card for so long," he said. By denying public access to key information, "all you're doing is adding suspicion to this."

Please lead US as Charles Grant did -- emulate him ( • Call on leaders and colleagues in the energy sector to join you -- boldly courageous • Begin scheduling the retirement and dismantling of the old fossil fuel infrastructure • Shift investments from carbon energy infrastructure to new carbon-free technology
For humanity For our progeny For your own legacy For a fellow Eagle Scout A Scout is TRUSTWORTHY

Please call me. Let’s talk. (510) 432-1452

Is this Exxon’s idea of good Corporate Citizenship?

Sign up to vote on this title
UsefulNot useful